When interviewing for junior development managers I have come across a consistent way of measuring whether the candidate has potential to be a good development manager.
The question is simple: “Imagine this office building [the one we are sitting in for the interview] is up for sale and you are to develop it into apartments, how would you evaluate this?”
The answers can range significantly but the point of the question is not what the solution could be, the point of the question is to evaluate how the candidate thinks about development. There is one key aspect of the answer that I listen for and if I don’t hear it fairly early in the answer I invariably think the candidate may be better positioned to a life in project management as opposed to development management.
The wrong way to answer the question is this: “well I would get an engineering report on the structure, and decide on a construction method, it will cost $2500 per meter, the building has 3000m2…..”
The development manager answers something like this: “Ok, I look at what apartments are selling for in the area, at $5500 per square meter, and assuming 5 sales per month we can afford to pay $4500 for this building so then we look at construction costs…….., however if we do this we can increase value by $300 per m2…..”
An aspiring development manager gets that it’s all about value. Costs are just one side of the equation, the sale price the other side, concentrate on only one and that will invariably come at the expense of the other.
A cost estimator or quantity surveyor can prove current costs and a valuer will give you a historical estimate of potential purchase price, but the development manager is the one you has to juggle both of these in a plethora of other variables to maximise value.
Good development managers essentially find the most value for the least cost.
When candidates volunteer information on marketing and keeping costs down and aiming for a target price and describing development as a massage of inputs rather than a singular focus on costs or prices then that is when their potential as a development manager is cemented in my mind.